Are you ready to get serious about saving for your future, but aren’t sure how much you should put aside each month? The question people ask again and again, is how much money do I need to save for retirement?
According to Money Magazine senior editor Walter Updegrave, the commonly cited 10 percent savings rule ( where you save 10 percent of your salary and assume you will have enough to retire on), is NOT the best rule of thumb for everyone.
The reason, Updegrave says, is due to several factors each person needs to take into consideration when thinking about how much they really need for retirement.
- Investment savings
- What investments earn
- How much spending money is needed for retirement
- How much assurance one wants that he or she won’t run out of money
Updegrave asserts that each individual has a different standard of living and material needs. For example, the higher your salary, the more likely you will need to save more money to be satisfied in the long run. It is essential that you take a deep look into the life you want to lead and take measured steps for reaching your goals.
In order to take the guessing game out of figuring out how much you need to save, CNN Money has developed a retirement savings calculator. The formula takes into consideration your current salary, how much you have currently saved, and what you will most likely receive from Social Security. Additionally, the greater your salary, the higher the percentage savings it calculates. Click here to see how much you should start saving.
While the CNN Money calculator is quite basic, there are others that allow for you to enter full details about your current investments, retirement age, and other key factors:
- CNN Money Retirement Planner
- T. Rowe Price’s Retirement Income Calculator
- Fidelity’s myPlan Retirement Quick Check
And of course, it is definitely a wise decision to make an appointment with a financial planner. You can visit the Financial Planning Association Website to find an expert near you.
While we wish we could provide a one-size-fits-all formula, the truth is you have to decide what you want your retirement lifestyle to look like. We hope these tools will give you a head start on planning your future!